The National Federation of Residential Landlords says the housing act 2004 fails both landlords and tenants and argues that for the first time since 1988 private landlords will reconsider whether they wish to remain as landlords.

Many properties will need to be licensed for the first time, says NFRL. This and other requirements of the housing act will cost substantial sums of money and landlords will be required to provide the funds. It will inevitably increase the rent charged to tenants.

Mike Stimpson, president of the National Federation of Residential Landlords says that since the introduction of the Housing Act 1988, when landlords were for the first time allowed to let properties at market rents and for fixed periods, the private rented market began to reverse its continued decline over the previous 50 years. Now landlords will again be considering whether to continue letting.

There is no question that a few rogue landlords do not provide decent accommodation – but most do, and the freeing up of the market since 1988 has demonstrated that landlords will let property if allowed to do so in a reasonably regulated climate, argues Stimpson.

The federation says that some local authorities will see this as an opportunity to license most of the private rented sector and will take all steps possible to do just that.

The number of deposits causing disputes between landlord and tenant is estimated at only one in 10,000. The federation argues that to regulate against all landlords (holding a total of more than 750,000 deposits) - in order to deal with a very small minority - and then not introduce at the same time an easily accessible deposit dispute resolution procedure without the need to use county courts - is evidence of political expediency and certainly not sensible regulation.

Mr Stimpson says by introducing the 2004 Housing Act, the government has failed both landlords and tenants by imposing unnecessary work on landlords and on local authorities, sadly the cost of which will be borne by the tenant.

The National Federation of Residential Landlords (NFRL) says it will do everything to ensure that this act is fairly and sensibly introduced through the secondary legislation.